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It May Only Take 18 Months to Re-establish Good Credit After Bankruptcy States Iowa Bankruptcy Lawyer

May 10, 2013

Des Moines, IA (Law Firm Newswire) May 9, 2013 – The biggest concern for those who go bankrupt is how it will affect their credit rating. This can be resolved over time.

It is common for debtors to wonder how they will ever get credit again after going bankrupt. While the situation may have been really bad, with some forethought and good planning, they can certainly re-establish credit. There are a number of things that one can do to positively affect credit scores after going bankrupt Iowa bankruptcy lawyer Kevin Ahrenholz indicated.

Many people do not realize that the Bankruptcy Code and the Fair Credit Reporting Act are federal laws, which means the period of time that a bankruptcy stays on a credit record is the same for every state. That period of time is 10 years. While that may sound incredibly depressing for discharged debtors, the reality is that it takes 18 months of paying all bills on time to repair a credit rating. Credit reporting companies feel that if a debtor shows that kind of responsibility, they are demonstrating they can manage their finances sensibly.

Generally speaking, the first step is to try and secure a job, even one that is part-time. The goal is to have a steady work record, as quickly as possible. The next step is to get copies of credit reports from the three top credit bureaus, at which point, the debtor should check all the information in it to make sure it is right. If the facts are not correct, they have the option of providing a statement explaining why something is not right. There is only 100 words to do that in, so a debtor needs to be focused suggested Ahrenholz.

As soon as any outstanding credit card debt has been paid down, destroy any excess cards and only keep one of two cards to use. This indicates to credit reporting bureaus the intention to be more responsible with money. There are various options open here as well that include getting a credit card from a local bank or store, getting a regular credit card or a secure credit card. Open a savings account and make regular deposits. Use the money to regularly pay bills, do not bounce checks and always pay on time. This shows responsibility with money and that a debtor is taking responsibility for paying their bills.

Discharged debtors may also be able to get loans from a credit union or bank. The idea here is to make payments on time and/or ahead of time. Check first to see if the institution reports all transactions to the credit bureau. Some do not.

Paying off an enormous debt and then re-establishing a good credit rating is not easy. It takes time, patience and a willingness to see everything through to the end. If a debtor sticks with their plan, the plan ‘will’ work.

Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact an Iowa bankruptcy attorney, Iowa bankruptcy lawyer, or set up an appointment, visit http://www.iowachapter7.com or call 1.877.888.1766.

Kevin Ahrenholz
309 Court Ave., Suite 805
Des Moines, IA 50309
Offices in Des Moines, Cedar Rapids, Waterloo, Mason City, and Vinton.